TLDR
- General Mills beat quarterly sales estimates at $4.52 billion but reported a 6.8% year-over-year decline
- Stock fell in premarket trading despite beating earnings expectations with 86 cents per share vs 81 cents expected
- Company maintained full-year guidance with organic sales projected flat to up 1% and earnings down 10-15%
- Pet food business grew 6% while North America retail sales dropped 13% in the quarter
- Management expects category growth below long-term targets due to challenging consumer conditions
General Mills delivered a mixed bag of results that left investors unimpressed. The Cheerios maker beat quarterly earnings expectations but couldn’t escape the ongoing sales decline that has plagued the company.
The food giant posted adjusted earnings of 86 cents per share, topping analyst forecasts of 81 cents. However, first-quarter sales of $4.52 billion, while beating estimates by a slim margin, represented a 6.8% drop from the previous year.
General Mills, $GIS, Q1-26. Results:
📊 Adj. EPS: $0.86 🟢
💰 Revenue: $4.5B 🟢
📈 Net Income: $1.2B
🔎 U.S. yogurt divestiture drove a $1.05B gain, boosting reported EPS, despite lower organic sales and profit. pic.twitter.com/H6i9d2qmmz— EarningsTime (@Earnings_Time) September 17, 2025
Stock performance reflected investor disappointment. Shares fell 1.2% to $48.99 in premarket trading following the earnings announcement.
Sales Decline Hits Multiple Segments
The sales drop wasn’t isolated to one area. North America retail sales tumbled 13% during the quarter, while foodservice sales in the region declined 4% to $517 million.
International sales provided a bright spot, rising 6% to $760 million. This growth helped offset some of the domestic weakness but wasn’t enough to prevent the overall decline.
The company’s struggles reflect broader consumer trends. Shoppers continue gravitating toward cheaper private-label products as inflation pressures persist.
Weight-management drugs have also created headwinds for packaged food companies. These medications reduce appetite, leading to lower food consumption overall.
Management Maintains Outlook Despite Challenges
CEO Jeff Harmening struck an optimistic tone about the company’s turnaround efforts. He emphasized investments in value, innovation, and new products for consumers.
“I’m pleased that we’re seeing the returns we expected on these investments,” Harmening said in a statement. The company maintained its fiscal 2026 guidance despite the ongoing headwinds.
General Mills expects organic net sales to range from down 1% to up 1% for the full year. Adjusted earnings are projected to decline between 10% and 15% in constant currency.
Management acknowledged that category growth would likely fall short of long-term targets. The company cited the continued challenging consumer environment as the primary factor.
Pet food emerged as a growth driver for the quarter. The segment saw 6% growth, though this fell short of the 8.5% increase analysts had expected.
Blue Buffalo, the company’s pet food brand, is expanding into fresh pet food. This move targets competition with popular brands like Freshpet and The Farmer’s Dog.
New product launches are central to the turnaround strategy. These include Cheerios Protein and high-protein Pitmaster Soups, designed to attract health-conscious consumers.
The company has increased advertising spending and in-store promotional events. These investments aim to drive brand awareness and sales volume.
Cost control remains a priority for fiscal 2026. Management plans new initiatives targeting an additional $100 million in savings.
Earlier this year, General Mills closed its in-house innovation unit. The company also paused additional investments through its venture capital arm as part of cost-cutting measures.
The stock has faced persistent pressure since last September. Shares are down 22% year-to-date, underperforming the S&P 500 Consumer Staples Sector Index’s 1.8% gain.
General Mills trades at 13 times forward earnings, representing a discount to many packaged-food peers. The company has posted declining net sales for five of the last six quarters, excluding the three months ended in November.
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